It’s all about parts — and increasing competitiveness of Iowa manufacturers

8/13/2007

What do Deere & Company, Harley Davidson and Oshkosh Trucks have in common? They’re original equipment manufacturers (OEMs) and they need parts — parts that often are made by small and medium sized companies.

Under charters that have been developed with Iowa manufacturers, Iowa State University Extension’s Center for Industrial Research and Service (CIRAS) is working with many of the small and medium sized companies that provide parts and equipment used by Iowa OEMs. Thanks to this program, suppliers of parts for some of Iowa’s major industries are getting a boost in their global competitiveness.

The process benefits both the suppliers and the OEMs by increasing productivity, decreasing manufacturing critical path time — the time from customer order receipt to order delivery on customer premises — and building trust, all key elements in keeping U.S. products competitive, according to Jim Black, CIRAS industrial specialist. He has worked with manufacturing extension partnerships, community colleges and outside consulting services to get the results that OEMs need.

Black said CIRAS has worked with about 15 suppliers since making the service available in 2005. CIRAS or partner facilitators — each with many years of manufacturing expertise — deliver the program through a two-day workshop at the supplier’s facility.

The goal is to describe the supplier’s current processes and examine how those processes can be changed to make future performance more responsive to the manufacturer’s needs. Lean enterprise principles, commonly used by the OEMs and taught by CIRAS, can be incorporated into the supplier’s processes as part of this study. Black said examples of benefits include significantly reduced inventory and quality costs plus an average reduction of more than 50 percent in manufacturing critical path time.

Deere & Company, an Iowa OEM, has been a primary user of the service, providing charters for CIRAS to work with several of its suppliers. Black said the program allows Deere to improve the effectiveness of the parts of its manufacturing process that it does not directly control. Suppliers benefit from an improvement approach that can be adapted to other parts of their operations.

Since 2005, Deere & Company has partnered with CIRAS to improve supplier order fulfillment flexibility and responsiveness for 11 suppliers in Iowa. CIRAS uses value stream mapping techniques to provide an unbiased evaluation of Deere’s supply chain.

Supplier capabilities are compared to Deere order fulfillment expectations to identify supply chain cycle time deficiencies. CIRAS then uses its manufacturing expertise to recommend solutions to align existing supply chain cycle times to Deere’s performance metrics.

“The value to Deere is the development of globally competitive suppliers in Iowa that allows us to support our build-to-demand strategies,” said Bob Smola, Deere & Company supplier development lead engineer. “We’ve used CIRAS for supply chain improvement projects since 2005 and plan to target additional work in 2008.”